When to Start Planning for Succession

I have an old friend I used to tease.  He had a major stake in his family’s international enterprise and when we talked about planning for the succession of leadership and ownership, he used to tell me that the kids would figure it out on the way home from his funeral.  I told him that his idea of long range planning was setting his alarm clock each morning.

Failing to plan for succession is an all too common theme.   It requires accepting that “change” will occur.  Most typically, people tell us that they’ll get to it eventually.   But when is “eventually?”  Meanwhile the kids are chomping at the bit- both to minimize Uncle Sam’s share of death taxes and for the ability to have a voice that is heard and has a level of control over their own destiny.

So, when is the time to start planning for succession?  The answer is “now.”  The mere fact that you are asking the question means you probably know you should have started a while ago.  The first step in the process is to ask yourself what has kept you from addressing it sooner.  Is it the concern that you might not have enough money in your later years if you give it away now?  Is the next generation prepared to have “control” over what may likely be your largest asset?  Are there marriage uncertainties that are giving you some anxious moments?  Are there unresolved conflicts among family member stakeholders?  Are you concerned that the next generation members may share common goals?  These questions and more are most likely lurking beneath the surface.  So rather than focusing on “planning,” we suggest you address the underlying issues that are causing the resistance.  Once you’ve got a handle and work them through to resolution, the planning itself with its anticipate will be far less stressful.

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